SEBI clarification on Discontinuation of usage of pool accounts for transactions in the units of Mutual Funds

The SEBI vide circular dated March 15, 2022 has issued clarification on Discontinuation of usage of pool accounts for transactions in the units of Mutual Funds. Existing mandates being used for Mutual Fund transactions can continue to remain in the name of the stock brokers / clearing members, subject to Stock Exchanges/ Clearing Corporations ensuring that Payment Aggregators (“PA”) puts in place mechanisms wherein beneficiary of the mandate can only be an Approved Account (which shall only be the bank account of the Clearing Corporation) such that:

1. PA shall directly credit the monies collected from the bank account of the investor only into an Approved Account; and
2. PA shall not act on instructions of the stock brokers / clearing members to alter or modify the list of Approved Accounts and in no case the monies shall be credited to the bank account of the stock brokers / clearing members.

“Mandate” refers to instrument, authorization or order in any form, including electronic means, to effect a payment by a person for the purpose of mutual fund investment; and Payment Aggregators refers to Payment Aggregators authorized / permitted by RBI and scheduled commercial banks acting in the capacity of Payment Aggregators.